French Tax Lawyer – Former Tax Inspector

French Tax Lawyer – Former Tax Inspector

French housing market picks up again

If the market for new housing construction remains hopelessly apathetic, the market of existing properties shows real signs of recovery.
Professional Investors have reported a 15.2% increase in the number of sales during the first half of 2015 compared with the first six months of the previous year.
Since the end of the second quarter 2015, the French real estate market enjoys a new life. The renewed dynamism of the real estate market brings itself its own limits. The increase in number of transactions triggers a lack of supply on the market, while increasing demand weighed on prices, which are rising again in the first half 2015.

Meanwhile a rise in mortgage rates that professionals feel inevitable, emphasize that they have remained at their lowest level since the beginning of the year. The interest rates have declined steadily since 2012. They were around 3.75% in July 2012; today they are around 2%. Having remained below the ceiling of 2.50% throughout the beginning of the year, real borrowing rates have raised awareness that it was necessary to finalise purchasing projects today, before some price recovery.

Price decrease has help for the closing of recent transactions. As of June 30, housing prices fell 2.1% year to year. However the average price per square meter has registered a national increase of 1.8% over the six last month.

THE RETURN OF CONFIDENCE

The fact remains that buyer confidence does seem restored, including for non-residents. Confirmed by INSEE, whose indicators synthesize consumer confidence, it posted its highest index since March 2010. The market registered a highly sustained demand and many investments projects are due to be finalised this summer or during the following weeks. Many sellers consider today that the economy moves forward again.

KEY FIGURES

The average purchase price decreased by 10% to 315,000 euros. The gap remains significant between regions with an average purchase prise in Paris amounting to 582,000 euros , against 287,000 euros in the provinces.